Hierarchies, Power Inequalities, and Organizational Corruption Valerie Rosenblatt Received: 2 October 2010 / Accepted: 6 January 2012 / Published online: 17 January 2012 Ó Springer Science+Business Media B.V. 2012 Abstract This article uses social dominance theory (SDT) to explore the dynamic and systemic nature of the initiation and maintenance of organizational corruption. Rooted in the definition of organizational corruption as misuse of power or position for personal or organizational gain, this work suggests that organizational corruption is driven by the individual and institutional tendency to structure societies as group-based social hierarchies. SDT describes a series of factors and processes across multiple levels of analysis that systemically contribute to the initiation and maintenance of social hierarchies and associated power inequalities, favoritism, and discrimination. I posit that the same factors and processes also contribute to individuals’ lower aware- ness of the misuse of power and position within the social hierarchies, leading to the initiation and maintenance of organizational corruption. Specifically, individuals high in social dominance orientation, believing that they belong to superior groups, are likely to be less aware of corruption because of their feeling of entitlement to greater power and their desire to maintain dominance even if that requires exploiting others. Members of subordinate groups are also likely to have lower awareness of corruption if they show more favoritism toward dominant group members to enhance their sense of worth and preserve social order. Institutions contribute to lower awareness of corruption by developing and enforcing structures, norms, and practices that promote informational ambiguity and maximize focus on dominance and promotion. Dynamic coordination among individuals and institutions is ensured through the processes of person-environment fit and legitimizing beliefs, ideologies, or rationalizations. Keywords Awareness Á Hierarchy Á Inequality Á Institutions Á Legitimizing myth Á Organizational corruption Á Outgroup favoritism Á Person-environment fit Á Power Á Social dominance orientation It certainly wasn’t because I thought about it care- fully ahead of time. I think I was arrogant enough at the time to believe that I could cut corners, not care about details that were going on and not think about consequences… I didn’t think I was going to get caught at all… I refused to deal with the everyday details - …these details were meant for other people, not for me. Sam Waksal, former CEO of ImClone, convicted for insider trading (Leung 2004). Introduction Many high-profile individuals like Sam Waksal, Ken Lay, and Dennis Kozlowski deny their intentional involvement in organizational corruption. Many say that they were not aware of the wrongdoings at the time of the incidents. Others readily support their corrupt acts. It seems that certain individuals associate power, status, and authority with the ‘‘get out of jail free card.’’ What factors and processes can explain the lack of awareness of the misuse of power in personal or organizational interests? How does power corrupt? The literature on organizational corruption defines the phenomenon as the misuse of organizational power, posi- tion or authority for personal or collective (e.g., group, V. Rosenblatt (&) Shidler College of Business, University of Hawai’i, Manoa, 2404 Maile Way, C-301, Honolulu, HI 96815, USA e-mail: valerie6@hawaii.edu 123 J Bus Ethics (2012) 111:237–251 DOI 10.1007/s10551-012-1204-y